Farmers find unique ways to defraud federal insurance plans

FARGO, N.D. — A handful of farmers have found creative ways to defraud federal farm programs in recent years.

Aaron and Derek Johnson are scheduled to be sentenced Monday after a jury convicted them of conspiring to receive il- legal payments and giving false statements. Prosecutor Nick Chase is asking seven years in prison per brother in the scheme he said cost the U.S. Agriculture Department more than $1 million.

Some of the fraud allegations can be difficult to prove, but emerging technologies such as picture imaging have improved the integrity of the program, said Chad Marzen, a lawyer and Florida State University professor who specializes in insurance law and regulation. That said, prosecutors in the Johnson case had to rely on the testimony of a former farmhand who happens to be serving time in prison for sexual assault.

The Johnson brothers, who farmed near

Cooperstown, North Dakota, were accused of adding spoiled and frozen potatoes to their stored crop and using portable heaters to warm the warehouse above 80 degrees to make the potatoes deteriorate faster. The defendants found that the best way to wreck the crop was using Rid-X, a chemical that’s designed to dissolve solid materials in septic systems, prosecutors said.

Neil Fulton, head of the federal public defender’s office for the Dakotas, said in a sentencing brief that he plans to ask for a sentence of probation for his client, who he said is an asset to his family and community and that prison would hinder his paying back the government.

Federal farm insurance is based on the trust that farmers provide truthful information, Chase said at trial. In addition to harming farm programs, Chase said, the brothers hurt neighbors who had to rely on established county pro- duction averages to establish insurance coverage.